Rooney: norms, contracts and lemons

The allegations that Wayne Rooney paid £1200 a time for sex brings a well-respected profession into disgrace. I refer, of course, to prostitution. In selling her story, Ms Thompson has broken the code that prostitutes, like priests and lawyers, do not divulge their dealings with clients.
This raises two economic issues.
One concerns the fragility of social norms. Why did Ms Thompson break the norm of her profession? One possibility is that she doesn’t consider herself a professional; she did not charge footballers who didn’t look like Shrek for her favours. Another possibility lies in the abundance effect; proximity to wealth makes people behave worse. And a third possibility arises  from peer effects. Ms Thompson’s peer group seems to be good-time girls rather than professional ones, so she was not sufficiently exposed to prostitutes’ moral code.
A second issue concerns contract enforceability. Mr Rooney probably thought that, in handing over so much cash, he was buying silence; such is the demand for sex with footballers that even he could get it for free. Ms Thompson broke this implicit contract.
But this contract was unenforceable - and it would have been, even if prostitution were entirely legal. Ordinarily, there are three ways of enforcing a contract. One is the threat of violence. But Mr Rooney couldn’t have used this, as it would only have made a better story. Another is to sue. But Ms Thompson doesn’t have the millions that would compensate Mr Rooney, should he get divorced. The third possibility is to rely upon the seller fearing a loss of reputation. But Ms Thompson probably judged that the gain from selling her story  outweighed this cost.
Put together, these issues imply that there is a potential market for lemons problem between famous men and prostitutes. Fearing that prostitutes might sell their stories, men will tend - at the margin -  to avoid them. This will reduce demand even for good prostitutes, who in turn might withdraw from prostitution into near-substitute professions such as acting, modelling or PR. The upshot will be a sub-optimally thin market. In this sense, Ms Thompson's behaviour has potentially serious consequences.

Comments

[Paul Sagar]

The last word on this should go to yesterday's Daily Star, which ran the immortal headling:

ROONEY TART: I CHARGED UGLY TAX

[Luis Enrique]

very good.

(but does it work? In the market for lemons, owners of good cars don't want to sell at prevailing price because car is worth more to them. Are good (discrete) prostitutes in possession of a good which is worth more to them than blabber mouths?)

[Luis Enrique]

I mean discreet don't I.

[Matthias Sammer]

presumably she sold her story because the NOTW were going to reveal her identity anyway - they weren't discreet and plenty of people knew about rooney's antics. so ms thompson chose to sell her story knowing if the truth's going to come out anyway, she might as well get rich off it...?

[Niklas Smith]

Matthias Sammer has an important point, much as I enjoyed your economic analysis. Remember that Brooke Magnati was forced to "out" herself in the Sunday Times when the Mail got wind of her identity; I don't think she would have done that had the gutter press kept their noses out of her private life.

[EB]

Is PR really a common alternate career path for prostitutes? As a PR exec I'm a little offended.

[ortega]

One marginal point. Maybe Rooney did not pay for the sex.
One famous LA madam, caught in a scandal that included actors and other famous and rich people, was asked why those people needed to pay for sex. After all, there were plenty of women willing to do it for free with them (yes, even with Rooney).
They do not pay for the sex, she answered, they pay for the woman to leave after.
Ah, the eternal masculine !

[john malpas]

I am surprised that such famous people do not have 'friends' who may lean on such a woman rather heavily. After all beauty is a fragile thing.